Oct. 12, 2025 7:52 PM ETS&P 500 Index (SP500)META, GOOG, MSFT, ORCL, NVDA, SPX, VIX, GOOG:CA, GOOGL, META:CA, MSFT:CA, NVDA:CA, ORAC:CA, SPY, SP500Damir Tokic12.33K FollowersSummaryThe S&P500 sold off in reaction to the surprising trade war escalation between the US and China, and for now this is a liquidity shock selloff.However, the AI trade is still strong, and the selloff is unlikely to burst the AI bubble, for now.The volatility is likely to increase as the bubble tops, and investors should not chase this bubble.Getty ImagesThe bubble burst thesisThe S&P500 (SP500) is trading at bubble-like valuations, with some valuation measures are at the record high levels (the Buffett indicator), while the Shiller PE ratio of around 40 is just below the 2000 dot-comsThis article was written byDamir Tokic12.33K FollowersCommodity Trading Adviser (CTA), member of National Futures Association. Professor of Finance, research on Global-macro issues. Editor-in-Chief, Journal of Corporate Accounting and Finance.Analyst’s Disclosure:I/we have a beneficial short position in the shares of SPX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.CommentsRecommended For You